Obama, to extend middle-class tax cuts

President Barack Obama said on Tuesday the United States must extend tax cuts for the middle class but could not afford to do so for the wealthy, laying out his position before next week’s meeting on the issue with Republicans. Obama, who also told hard-hit Americans the U.S. economy was on the mend, said extending the middle-class tax cuts was critical to keeping the economic recovery on track. “If we allow these taxes to go up, the result would be that a lot of people most likely would spend less. That means that the economy will grow less,”he told workers at an auto plant.

Republicans, who won control of the House of Representatives in November 2 elections as voters punished Obama’s Democrats for a sluggish economy and high unemployment, want to make the tax cuts permanent for all Americans. “Next year, taxes are set to go up for middle-class families unless Congress acts,” Obama said. “If we don’t act by the end of the year, a typical middle-class family will wake up on January 1 to a tax increase of $3,000 per year.” The president meets Republican and Democratic congressional leaders on November 30 to work out what to do about the Bush-era tax cuts and other pressing legislation to complete before a new Congress begins in January. Obama says taxes should rise for families making more than $250,000 a year, but he has made extending cuts for middle-class families a top policy priority. “This is actually an area where Democrats and Republicans agree,” he said. “The only place where we disagree is whether we can afford to also borrow $700 billion to pay for an extra tax cut for the wealthiest Americans — millionaires and billionaires. I don’t think we can afford (that) right now.” The bailouts were unpopular with many Americans. Obama wants to persuade the public they were worth the money, and used his visit to the Midwest, critical to his re-election chances in 2012, to sell that message.